Thursday, May 27, 2010

Making good decisions requires information. As long as you do not have so much information that you cannot make any decision at all, having more information is an essential good.

Managers acquire information by reading and studying reports... in detail, down to the last semi-colon. You may recall that Michael Burry was one of the first to see the problems with subprime mortgages, because he was one of the few who read all of the prospectuses contained in the packages the banks were selling.

No good manager relies only on prepared reports. He wants and need people who will provide him with clear, accurate, and comprehensive information. Sometimes he will receive it via email, but on other occasions he knows that he will acquire more information by talking directly with staff.

A manager cannot be everywhere, and should not try to be. Frenetic activity is disconcerting to those who witness it and should be avoided.

A manager must create an atmosphere where people will present him with what he needs to know when he needs to know it... not too much and not too little.

Every manager and every coach has had the experience of analyzing a problem based on information provided. He will draw up a plan to address the problem and present, or even begin to implement, the plan. At some point in the planning process someone will interject that the plan is not feasible because someone forgot to communicate one small, but vital, piece of information.

If you are the manager, you will be tempted to exclaim: Why didn't you tell me?

Here is a situation where it is best not to yield to temptation. The question is accusatory and will provoke a defensive response.

If the employee comes to feel defensive about his error, he might be motivated to share more information, but his anxiety might also make it more difficult for him to know what is pertinent and what is filler. If he decides he must provide you with a mountain of useless information you will not have accomplished your goal.

If you need to respond to a negligent employee, why not phrase it differently, not with a question, but a statement: I wish you had told me sooner.

This places some of the onus on the employee while not casting blame. It also offers a sliver of credit for having communicated the information: better late than never.

A recent post from the Harvard Business School blog offers a further analysis of this problem. Link here.

The post makes the salient point that if a manager's staff does not speak up, does not provide useful and vital information, then the manager must ask himself how he has created the wrong office environment.

As the authors note, it is obvious to everyone that a bullying or threatening manager will receive less accurate information. If everyone is afraid of you they will tailor their communications to forestall punishment, not to contribute to the company good.

Other managers give the impression that they are either overwhelmed by work, and thus, do not really want to be disturbed, or are perfectly happy with the status quo, thus, do not want to hear any information that would cause them to question or to change it.

Then the authors add the most salient, and probably the least noted point: namely, that many staff members do not communicate their ideas or information because they have come to believe that their managers are simply not interested in hearing it.

So, how does a manager go about convincing his staff that he wants their input? That is the question.

This is difficult because the cues we give are often very subtle indeed. A dismissive glance might persuade your assistant that you do not want to hear what he has to say. A clear focus and direct expression of interest will obviously tell him that you are happy that he has spoken up or provided you with new information.

If information comes to you via email, you have better control over your response. You should always respond graciously and with gratitude. And you should explain how helpful it is to receive the information. If the information leads to action, you would do well to keep the employee in the loop.

If your reply reads like a form letter, your employee will come away thinking that you do not care. If it reads like you have thought through his proposal or found his information useful, then he will know that you do.

It is always challenging to know how to respond when a staff member raises a difficult issue during a meeting, when he explains that something has been going wrong, or that the results you had hoped to see do not seem to be feasible.

When hearing bad news, the first thing to do is to thank the person who reported it. Then, be sure not to try to find out who is at fault, who should be blamed.

Upon hearing bad news the correct response is to shift focus to contingency plans or mid-course corrections.

All recommendations for future action should be received respectfully. That means restating the idea in slightly different words, the better to show that you are mulling it over. You must recognize the good will that went into formulating it.

You are not going to follow every suggestion that you receive, but you should, as a competent manager, make all of those who offer suggestions feel like their contribution is valued.

People rarely have a vital interest in whether or not their ideas are adapted. They do have a vital interest in whether or not they are respected.